Mobile money defied the onslaught by inter-bank transfer platform PesaLink to grow the amount transacted via phones by nearly a fifth in the first four months to April.
The latest Central Bank of Kenya (CBK) data shows that mobile payments grew 15 per cent to Sh1.19 trillion at the end of April compared to Sh1.04 trillion during a similar period last year.
This double-digit growth in volumes came despite Kenya’s commercial banks in February launching their own platform for bank-to-bank cash transfer which eliminates going through telcos’ wallets.
Lenders were banking on PesaLink to take a bite of the lucrative digital cash market, but experts say given the utility and ubiquity of mobile money, the lenders’ platform is not likely to slow down mobile money growth.
Stephen Mwaura Nduati, a former head of national payments system at the CBK, described PesaLink as a “low-level real-time gross settlement platform” where customers instruct banks to electronically transfer funds.
“Theirs is a remote communication linking banks, and customers can give instructions of funds transfer via phone. It is not similar to mobile money,” said Mr Nduati, who retired in April.
The scope of use of mobile money has also grown beyond peer transfers to include loan disbursement, receiving dividends, diaspora remittances, sports betting, paying for shopping and utility bills, and lately, selling of government securities which raised Sh150 million in the inaugural M-Akiba bond.
Tangaza Pesa CEO Oscar Ikinu said mobile money beats PesaLink due to accessibility of the service through agents.
“It’s about touch-points. They don’t have agents hence hard to compete with mobile money. Pricing is not even a factor, it’s about access to service,” Mr Ikinu said.
Kenya had 34.28 million mobile money users who transact on six major platforms— M-Pesa, MobiKash, Airtel Money, Orange Money, Tangaza, and Equitel. PesaLink has signed up over 3.5 million customers.